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8. 2006 ANNUAL REPORT ON BUILDING CODE FEES RAPPORT ANNUEL DE 2006 SUR LES DROITS DE PERMIS DE CONSTRUCTION |
Committee recommendation
That Council receive the 2006
Annual Report on Building Permit Fees, as outlined in Document 1.
Recommandation du Comité
Que le Conseil prenne connaissance
du rapport annuel de 2006 sur les droits de permis de construction, qui fait
l'objet du document 1.
Documentation
1.
Deputy
City Manager's report Planning,
Transit and the Environment dated
23 March 2007 (ACS2007-PTE-BLD-0010).
2. Extract of Draft Minutes, 10 April
2007.
Report
to/Rapport au:
Planning and Environment Committee
Comité de l'urbanisme et de
l'environnement
and Council / et au Conseil
23 March 2007 / le 23 mars 2007
Submitted by/Soumis par : Nancy Schepers, Deputy City
Manager,
Planning, Transit and the
Environment/Directrice municipale adjointe,
Urbanisme, transport en commun et
environnement
Contact
Person/Personne ressource : Arlene Gregoire, Director
Building Services and Chief Building
Official/Direction des services du bâtiment et
Chef du service du bâtiment
(613) 580-2424 x41425,
arlene.gregoire@ottawa.ca
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SUBJECT: |
2006 ANNUAL REPORT ON BUILDING CODE FEES |
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OBJET : |
RAPPORT
ANNUEL DE 2006 SUR LES DROITS DE PERMIS DE CONSTRUCTION |
REPORT RECOMMENDATION
That the Planning and the Environment Committee recommend that Council receive the 2006 Annual Report on Building Permit Fees, as outlined in Document 1.
RECOMMANDATION DU
RAPPORT
Que le Comité de
l'urbanisme et de l'environnement recommande au Conseil de prendre connaissance
du rapport annuel de 2006 sur les droits de permis de construction, qui fait
l'objet du document 1.
BACKGROUND
Pursuant to Section 7.(4) of the Building
Code Act, the City is required to prepare a report containing information on
the building permit fees collected, as well as the costs of servicing building
permits and enforcing the Building Code Act and Building Code. Regulation Division C Part 1 (1.9.1.1)
further directs the municipality to distinguish between direct and indirect
costs, as well as to include in the report the balance of the reserve(s) at
year end, where such have been established.
The attached Annual Report, the first report
prepared as a result of the new legislative requirements introduced by the
Province July 1, 2005, goes beyond the legislative requirement to report on
revenues, costs and the status of reserve funds only. Specifically, in addition to the status on revenues, costs and
reserve funds, the Report features the City’s performance against both
provincially mandated and Council-mandated timeframes for service delivery, and
provides background information on the impact of the new legislation.
CONSULTATION
The City is required to report annually on
the status of building permit revenues, costs of servicing building permits and
enforcing the Building Code Act and Building Code, and reserve funds and to
make the report available upon request.
Accordingly, consultation was not undertaken.
FINANCIAL IMPLICATIONS
There are no financial implications
associated with this Report.
DISPOSITION
The Annual Report will be posted on the
City's website and distributed upon request.
DOCUMENT 1
2006
ANNUAL
REPORT
on
Building Code Fees
City
of Ottawa
Ce document est également disponible
en Français.
MESSAGE FROM THE CBO
I am very pleased to present to you the first ever
Annual Report for the Building Services Branch, of the Planning, Transit and
the Environment Department, of the City of Ottawa.
Our dedicated and knowledgeable team has
effectively positioned this organization to meet the challenges introduced
through the legislation known as the Building Code Statute Law Amendment Act
(formerly referred to as Bill 124). Preparing this Annual Report provides us
with an opportunity to demonstrate the progress we have made through business
analysis and re-engineering to meet the newly legislated performance standards.
This report goes beyond the basic reporting
elements that were provincially mandated in order to showcase our successes to
date, to give notice of those elements that are creating some challenges, and
to highlight new initiatives that will be piloted soon and that hold the
promise of significantly enhancing our service to the industry.
We go forward with a renewed commitment to service
improvement, innovation, and fiscal accountability.
Arlene Grégoire,
Chief Building Official
Director of Building Services Branch
SUMMARY
Pursuant to Section 7.(4) of
the Building Code Act, the City is required to prepare a report containing
information on the permit fees collected, as well as the costs of servicing
building permits and enforcing the Building Code Act and Code. Regulation
Division C Part 1 (1.9.1.1) further directs the municipality to distinguish
between direct and indirect costs, as well as to include in the report the
balance of the reserve(s) at year end, where such have been established.
Accordingly, the following information is provided:
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Actual
2006 |
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$000 |
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Building Permit Revenues |
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$ 20,795 |
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Less: |
Expenditures |
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Direct Costs |
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$ (9,607) |
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Indirect Costs |
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$ (3,765) |
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Transfer to Building Code
Enforcement Reserves |
$ (7,423) |
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Reserve Fund Balances |
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Revenue Stabilization |
Insurance |
Capital Contribution |
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$000
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$000 |
$000 |
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Closing Balances |
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December 31, 2005 |
443 |
443 |
1,330 |
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December 31, 2006 |
6,500 |
597 |
2,632 |
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This documentation constitutes
the 2006 Annual Report for Building Services Branch of the Planning, Transit
and the Environment Department of the City of Ottawa.
THE
LEGISLATION
The Ontario Building Code is a regulation made under the Building Code Act, 1992. The legislation was recently restructured with the introduction of the Building Code Statute Law Amendment Act, 2002 (previously referred to as Bill 124) and associated amendments to the Ontario Building Code. Segments of the new regulations were implemented in a phased-in sequence commencing September 1, 2003, with key parts implemented July 1, 2005 and the remainder on January 1, 2006.
The amendments imposed new responsibilities and challenges, specifically:
- Municipal Building Code officials were required to pass provincial qualifying exams to be able to review construction plans, approve permit applications and inspect construction after December 31, 2005;
- Mandatory timeframes were established for service delivery;
- An additional stage of construction was added to the required inspection list;
- A province-wide set of forms for building permit application and Orders was instituted;
- Building permit fees were set to cover only the costs associated with servicing building permits and enforcement of the Building Code Act and Code;
- A code of conduct for the Chief Building Official and
municipal Building Code officials was introduced; and
- A requirement was added for the preparation of an
annual report on total revenues versus costs and the status of reserve
funds, where such have been
established.
MEETING THE CHALLENGE
The Service Challenge
The Building Services Branch is the municipal authority in Building Code knowledge, regulation and enforcement. The Ontario Building Code establishes uniform minimum standards for health, life safety and structural sufficiency that must be included in the construction of a building. The Branch assists property owners, builders, and design professionals (e.g. architects, and engineers) in their quest to ensure their construction meets the Building Code by providing direction in the interpretation and application of the Act, the Building Code, and applicable laws (eg., zoning by-laws, Heritage Act, Nutrient Management Act, etc.).
The provision of direction, interpretation and application of the Building Code Act and Code is achieved through,
- the review of construction drawings and documentation,
- the issuance of building permits,
- the verification by inspections of construction to determine compliance,
- the enforcement of the Building Code standards and applicable laws,
- the prosecution where compliance is not achieved, and
- the management of risk involved in enforcing the Act and Code.
Our mission is to ensure the builder incorporates
the minimum building standards related to health, safety and structural
sufficiency into their construction, as set out in the Ontario Building Code.
Although the municipality’s
role is that of a regulator, the Branch strives to work closely with the
industry to ensure that the process of reviewing permit applications and of
undertaking the inspections is structured in a manner that supports the
development and construction process, while ensuring compliance with the
legislation. For example, Branch Management consulted with a Builder Liaison
Group during the months leading up to the implementation of the new legislation,
as well as following the implementation date, to facilitate the implementation
of the new legislative requirements affecting both the City and the industry.
Changes introduced in 2006
The implementation of the new
legislation necessitated a number of changes to the City’s business processes
and service standards. The most significant changes affected how applications
were processed. This meant major modifications of the intake and review of
applications processes, the information management system (called MAP) that
tracks applications, the various thresholds, and now, turnaround times. The
legislation also required that we revise the Building By-law, re-format the
Branch’s budget and update policies, procedures and guidelines.
The new legislation provided opportunities
to improve on service delivery to the industry and homeowners and to
realize greater efficiencies. For example, we have re-integrated
Building Code-competent and technical staff in service counters to assist
applicants in submitting “complete” applications, to pre-screen and stream the
applications, and to confirm the applicable timeframe to the applicant for
response or issuance of a permit. This
service enhancement has maximized the interaction between Code experts and
applicants and has minimized the number of incomplete applications being
submitted prematurely. The Building Code Web page on ottawa.ca was expanded to
include detailed information for homeowners and do-it-yourselfers, and an
e-mail inquiry service was initiated to respond to questions of a general
nature.
Mandatory timeframes
Reviews of Building Permit Applications
The new provincial legislation introduced timeframes within which the Chief Building Official must render a decision regarding the issuance of a building permit. Where the determination is made that a permit cannot be issued due to zoning, Code deficiencies or non-compliance with applicable law (e.g. no planning approval), the Chief Building Official is required to advise the applicant of all the reasons.
These provincially legislated timeframes for building permit applications are as follows:
Type of building/projects |
Provincially mandated timeframes |
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House (includes most small homeowner projects and detached, semi-detached, town and row houses) |
10 business days |
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Small buildings (includes small farm buildings) |
15 business days |
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20 business days |
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Complex buildings |
30 business days |
Review of the Branch’s performance for all tasks against the provincially legislated timeframes for decision for 2006 indicates that the timeframes were met 83.04 per cent of the time.
Percentage of applications determined within provincially legislated timeframes
Although
additional resources were
established in 2005 to strengthen the Branch’s ability to address the
challenges resulting from the new legislation, the Branch encountered
significant difficulties in recruiting qualified and Code-competent Building
Officials. In the area directly involved in processing applications, the Branch
experienced a 27 per cent vacancy rate in 2006.
Council-Directed Enhanced Service Levels
In its approval, on June 22, 2005, of a report that dealt with the legislative changes introduced by the Province commencing July 1, 2005, (ACS 2005-PGM BLD-0010), Council approved an enhanced service level for the initial review of small homeowner projects to be completed within 5 working days as opposed to 10 working days.
This measure maintained current service levels in support of homeowner small projects, (porches, sheds, decks and interior alterations) where the administration process prescribed by the Province was lengthier than the construction project timeline.
Council also approved maintaining the previous Branch service level for the completion of the initial review for tenant fit-up applications at 10 days as opposed to the legislated timelines of 15 to 30 working days depending on the building type. This measure recognized that the Branch’s previous service level was established to encourage compliance with the Ontario Building Code.
Branch performance levels in 2006 against these enhanced service levels reveals that the Branch was able to achieve the timeframes as follows:
§ small homeowner projects – 72.32 per cent
- tenant
fit-ups – 65.52 per cent
Percentage of applications determined within both legislated and Council-enhanced timeframes
Mandatory inspection timeframe
The new legislation introduced a timeframe for undertaking mandatory inspections. Specifically, the Branch is now required to undertake mandatory inspections within two working days following the receipt of a Notice of Readiness for Inspection from the permit holder, at defined stages of completed construction.
The capacity to track and report on the performance of the Branch’s response time following receipt of a mandatory notice will be developed at a later date, as the ability to do so is predicated on the availability of technological tools and further enhancements to the City’s management information system. A project to develop this capacity has been identified as a capital project with a timeframe of 2007-2009 for development, testing and launch.
Overall, the Branch has been able to respond to the notifications within the mandatory timeframe of two working days. However, during peak construction periods, we had difficulty meeting the mandatory turnaround times due to the number of Branch vacancies.
Building Official Internship Program
As a result of the recruitment difficulties and as part of the Branch’s succession plan for addressing future departures of senior Officials, a Building Official Internship Program was established in 2006. This training program brings onboard recent technologist graduates (Architecture or Engineering) and provides them with specific Building Code training over a maximum period of 24 months.
Mandatory qualification of the Chief Building Official and Building
Officials
All the
Building Officials were able to acquire their provincially mandated qualifications by December
31, 2005. The legislation’s deadline
was January 1, 2006.
The Cost of Servicing Building Permits
The new legislation directs municipalities to set building permit fees to recover only the cost of servicing building permits and the cost of enforcing the Building Code Act and Building Code. These include both direct and indirect costs. Direct costs include the compensation costs for the Chief Building Official, management, Building Officials, and Technical Clerks, training and development costs, computers, telephones, fleet vehicles, etc. – essentially all the costs that would be incurred if the Branch was privatized. Indirect costs include a portion of the budget of the department head’s office, accommodation costs, a portion of costs of other Branches that support the Building Code Services Branch, such as Legal Services, Financial Services, Information Technology Services, Client Services and Public Information, Employee Services Branch, etc.
For 2006, the direct and indirect costs, excluding the contribution to the reserve funds, were:
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Direct costs |
$9,607,000 |
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Indirect costs |
$3,765,000 |
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2006 Totals |
$13,372,000 |
Of total costs, 72 per cent are direct costs while 28 per cent are indirect. As the requirement to track direct and indirect costs is a new legislative requirement, this annual report is not able to include the comparative data of other large municipalities. This information will be available for future reports.
Permit Fee Rate
In 2004, the building permit fee rates were set at $13.50 per $1000 in construction value for all buildings and structures and $9.45 per $1000 in construction value for farm buildings, as assessed.
In 2006, the submission of
8113 building permit applications generated $20,795,000 in building permit revenues,
compared to 8108 applications and $20,314,000 in 2005.
Reserve Funds
The Province recognized the need for reserve funds to ensure municipalities are able to fulfill their legislative mandate despite a downturn in construction activity, and to cover long-term capital investments and special costs/liabilities. The City has established three reserve funds to which surplus building permit revenues are allocated at year end.
Revenue Stabilization Fund: to safeguard the City’s ability to fulfil its legislative mandate to enforce the Building Code Act and Code by covering 100 per cent of the total direct costs associated with the activities of servicing building permits and enforcing the Act and Building Code where there is a decline in building permit revenues/volumes, year over year.
Insurance Fund: to cover costs associated with lawsuits, as a result of the City’s mandate to enforce the Act and Code, not covered by the City’s general liability insurance policy, as liability is jointly and severally held by the municipality, and for the City’s deductible for claims covered by the City’s general liability policy. The cap for this reserve has been set at $6M.
Capital Contribution Fund: to cover capital expenditures in support of the activities related to servicing building permits and enforcing the Building Code Act and the Building Code, such as new fleet vehicles, additional computers, safety equipment and tools for staff, new workstations and renovations to accommodate the new staff, and for the development and implementation of new technological information systems and improvements to the Building Code Services Branch’s (GIS) Geographic Information System-based building permit tracking system, including but not limited to remote technology for the inspection program and the development and provision of e-portal services to applicants. The cap for this reserve has been set at $5M.
The funds will be retrieved as the programs or above-noted requirements come on stream as per program requirements, the Building Code Act and the Building Code.
As of December 31, 2006, the following fund balances were as follows:
Building
Code Enforcement Reserve Funds
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Revenue
Stabilization (810076) |
Insurance (810075) |
Capital
Contribution (810070) |
Total |
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Opening balance
(01/01/06) |
443,259 |
443,259 |
1,329,776 |
2,216,294 |
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2006
Planned Contributions |
136,000 |
136,000 |
408,000 |
680,000 |
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Surplus |
5,902,664 |
|
840,000 |
6,742,664 |
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Interest[1] |
18,000 |
18,000 |
54,000 |
90,000 |
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Opening balance (01/01/07) |
6,499,923 |
597,259 |
2,631,776 |
9,728,958 |
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2006 Achievements
·
Implemented
the new provincial legislation and modified and refined our business processes.
·
ottawa.ca: The general public is served through a
number of information channels with the City’s Web site, ottawa.ca being the
primary source for information on application processes, fees and submission
requirements. The Web site was updated
specifically to assist homeowners and do-it-yourselfers. While reviewing
material on the Web site, individuals can submit questions directly to Branch
staff through a building pemit and a building records inquiry portal.
·
The Branch developed the capacity to monitor and report
on its performance as against the mandatory timeframes introduced by the new
legislation. The development of
enhancements for the City’s management information system and the development
of BI tools will enable the Branch to monitor and report on its performance
specifically regarding the mandatory timeframes for permit reviews, commencing
2007.
· Established a Building Official Internship Program.
Things to come in 2007
Legislated measures:
· Implementation of the latest legislative changes, specifically, the Objective Based Code format and the development of a strategy to implement changes to business processes, and the 700 new technical amendments to the Building Code.
Technology:
· Development and launch of an e-portal service where tract house builders can submit building permit applications for production/model homes via ottawa.ca. The service will allow the builder to submit applications at any time and view and determine the status of all their applications that are in stream.
Training and Development:
· Recruitment and training of Building Officials, and Code Engineers.
· City of Ottawa, Building Code Services Branch is hosting the 2007 Annual Meeting and Technical Training Sessions for the Ontario Building Official Association September 2007.
Other:
· Updating the Branch’s Risk Management Strategy.